Google: Price Targets Inching Toward $1,000

Google price targets continue to be ratcheted up after last night’s beat and raise financial results. Among others, I see this morning that RBC’s Jordan Rohan has raised his GOOG target to $725, and he rightly points out that the stock, even after its current run, trades at 24x 2009 EPS, a discount to the company’s growth rate (which GOOG bears won’t care about, because they don’t buy the 2009 EPS figures, of course).

Mark Mahaney at Citi has a note out upping the Google price target ante. He calls the company’s continuing high growth rate “extremely impressive”, and ups his target to $775 (!) based on rolling forward to 2009 EPS multiples.

Comments

Some notes about GOOG earnings:
1. I read somewhere (cant find the link now) that while GOOG ‘beat’ the revenue numbers by 70 million, it had a gain of 121 milion solely due to the weak $. So, the revenue was actually a miss but for the weak $ help!
2. Traffic on Google owned sites decelerated while that on partner sites
(Adsense) increased and that is bad. Why? Coz keyword prices are way less on non-Google owned sites and also much more exposure for click fraud.
3. Their international revenue remained stable — helped by 121 million weak $ gain. But for that gain, the international revenue *declined*.
4. The price per click is what drove up the revenues and not a realistic increase in the number of clicks. Any pricing pressure (due to Microsoft’s Live and Yahoo coming on strong, for example) and GOOG would have difficulty meeting the revenue numbers.

Yeah but the higher GOOG gets the more it turns away new investors because they know it has to go up a LOT from here for them to net a good gain over a year or two (sure you can specualte GOOG at 10000 in 2030 but frankly who wants to wait for that? At this point to double your money GOOG has to hit 1400 and do you think it will? The gains have mostly been made despite Cramer and other pundits – and remember he only has 3 horselen now after having dropped amazon – he could drop GOOG in 2008. Tnhis isn’t 1999 when the sky is the limit. Goog’s day of reckoning will happen – no STOCK GOES STRAIGHT UP.